Maldives

Risks and Opportunities for Solar pp

Asian Development Bank Clinton Foundation Cli F d i Solar Conference, Jodhpur September 13, 2011

Maldives Power Scenario

Power supply on 10 islands including Male is carried out by STELCO; 100% government financed electric utility 7 Utilities now cover Maldives Power demand in Male growing at 11% p y g g per year ( (Peak demand in next 5-7 years will reach more than double the capacity of generation facilities) Resorts islands have their own generation facilities Maldives has announced to be the first carbon neutral country by 2020 Why invest in diesel generators and not Solar when Electricity price from diesel is 30 US cents per unit as compared to 18-22 US cents per unit f d t 18 22 t it from solar PV l Solar energy is carbon free and is endemic to the Maldives
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Solar in Maldives Current Status

President Nausheed sets an example o Install solar PV panels on roof of his official residence in Male Uptake of solar panel technology has been limited in Maldives apart from small scale installations on some islands and several grant aid projects Project for Clean Energy Promotion in Male promotes rooftop based grid connected SPV systems in Male o This project is a grant from Government of Japan Under 1st phase of this project, 390 kWp of solar PV systems will be installed on the rooftops of public buildings which have been identified as potential sites after proper surveying By the end of 2nd phase: pp p grid o Male will have approx 700 kWp of g connected SPV, which is approx. 2.6 % of pealk electricity demand in Male. o Project expected to be completed by 2013
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Risks and Challenges in Maldives

Risks for international investor/developers for investing in solar in Maldives - Country Risk - Maldives is not a LDC any longer y g - Maldives debt is at 70-80% of GDP, factor into loan limits from MDB or other development partners in the short term - OECD Consensus Rating - Considered relatively high risk - Lending Issues - Lack of domestic sources of long term finance - high opportunity cost - Regulatory issues - Guidelines, regulations, technical design to be put in place - Policy issues - Required legislation, rules, and policy to be finalised

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Risks and Challenges in Maldives (Contd.)

Risks for international investor/developers for investing in solar in Maldives - Land scarcity - Male is congested has around 40 MW of p g peak p power demand - Total resorts installed capacity is about 100 MW - Most of the resorts and islands follow their own concession agreement p y - Local issues/Capacity issues - Few companies understand solar - Local skilled labour not available yet y , - Land may not be available, corrosion has to be considered.

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Investment Opportunities in Maldives

Favourable Geographical Location
o Proximity to equator - lots of sunshine (`5.2 kWh/m2/day)

Extreme dependency on imported petroleum

o Bulk of fuel imports include diesel fuel oil

G Growing energy demand i d d

o Growing electrification of islands o increasing tourism Drivers for Solar development

Dispersed nature of islands

o does not allow installation of single national grid

Vulnerable to rising fuel costs & price shocks One of the most vulnerable nations to climate change impacts
o Fishing & tourism crucially dependent on environment v
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Investment Opportunities in Male/Hulhumale

Business Case for solar - Electricity price in - Male is about 30 US cents/unit - Resorts is about 40 US cents/unit - O t island i about 40 US Outer i l d is b t cents/unit - Solar LCOE for 25 years is about 20 US cents/unit - Payback periods can be 3-6 years - No need for FIT unlike India, Germany etc y - Peak shaving in morning and afternoon will directly save diesel - STELCO should invest in solar instead of diesel or gas
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Male Energy demands

80,000

70,000

60,000

Peak Load (kW) k

50,000

40,000

30,000

20,000

10,000 10 000

Year
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Business Case: Diesel replacement by Solar

Island
Male

item
Power generation (kWh) Fuel consumption (liter)

2008
195,105,695

Yearly Diesel Fuel Saving Year Male Island (liter) 88,048 176,096 264,144 352,192 440,240 , 528,288 616,336 704,384 704 384 792,432 880,480 4,842,638 Hulhumale Island (liter) 6,773 13,546 20,319 27,092 33,865 , 40,638 47,410 54,183 54 183 60,956 67,729 372,511
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50,460,116

2011 2012 2013 2014 2015 2016 2017

Fuel 0.26 consumption per kWh (liter/kWh) Hulhumale Hulhumale Power generation (kWh) Fuel consumption (liter) 7,324,293 7 324 293

2,061,552

2018 2019 2020 Total

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Fuel 0.28 consumption per kWh (liter/kWh)

Total 12,687 tons of Carbon emissions in 10 years

Source : JICA 2009

Investment Opportunities for Resorts

On an average one resort uses 1 MW of power, all on diesel There are about 100 resorts in the country each on its own island Including international resorts like Hilton, Sheraton and local resorts like g Bandos and Paradise who are keen on replacing diesel with solar Resorts are ready and looking to financing to kick start the process Many resorts have open space and also roof top available Resorts would like to be independent of diesel but seek reliable supply Poor understanding of PV in some cases affects decision making Resorts want to sell rooms, not generate power PV and BIPV are possible solutions for centralized and decentralized generation in the resorts, maintaining the aesthetic Opportunity cost of capital, payback impacts investment decision Energy efficiency is a must and has been overlooked Sustainability as a goal for resorts is intended, but knowledge in scarce in how to do it Possibility to have a credit line with resorts is being explored. P ibilit t h dit li ith t i b i l d
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Investment Opportunities in solar Rooftops

Potential grid connected solar PV capacity is 7.3 MW (JICA, 2009) The possible installation by 2020 on M l i l d (12 6 Male island (12.6 MW) requires space of approx 90,000 m2 g Potential grid connected solar PV capacity in Hulhumale is 0.89 MW (JICA, 2009) Possible capacity on Hulhumale island (0 89 MW) (0.89 requires approx 6,000 m2) For Hulhumale, standard housing has 750 m2 of roof g top areas and only eight houses are almost equal to required areas for PV installation
Hulhumale energy demands
18,000

16,000

14,000

Peak Load (kW W)

12,000

10,000

8,000

6,000

4,000

2,000

Years

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Investment Opportunities in solar Rooftops

All islands have common places and shades and need power y g 200 councils were recently created throughout the Maldives Solar energy is a priority of many Create j b C t jobs, companies and education i solar energy i d d ti in l

Young population lacking opportunities and with social problems Lower latitude enables solutions facing all directions including north BIPV opportunities abound Electrical vehicles populate the resorts

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Thank you!
ADB International Consultant Agostinho Miguel Garcia agostinho.garcia@sunbd.pt Clinton Foundation Amit Jain ajain@clintonfoundation.org

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